Financial Translation Services: What to Ensure Before Hiring One?

The global markets often require translations of financial documents to fit the linguistic, legal, and cultural preferences of various regions.

Imagine this: A company expanding into a different market for revenue growth translates its financial documents for local regulatory bodies. However, a mistranslated term, identified by regulators, leads to hefty fines. Suddenly, a move aimed at enhancing the company’s presence resulted in significant losses.

Financial translation is converting complex yet vital documents like tax filings, income statements, investor agreements, audit reports, and other finance-related materials into different languages. A single mistranslation can have impactful consequences—so these conversions must only be made using professional financial translation services.

But how to find the right one?

This blog will answer the question.

Factors to Look for in Financial Translation Services

Always carry out due diligence and never hesitate to look for the following features before relying on a financial translation service.

Proficiency in Financial Terminology

Not all translation companies are familiar with complex financial terms. It is vital to only opt for a financial translation company to get the most suitable results.

Always check whether the linguistic agency has the following:

• Diverse and skilled linguists with a strong background in finance and accounting.
• Knowledge of formatting style used in financial reporting.
• Experience translating documents like balance sheets, equity reports, and annual filing reports.

Deep Knowledge of Legal Context

Financial documents, like tax filings, investor agreements, and shareholder contracts, contain legal terms that need accurate translations.

A professional financial and legal translation service can effortlessly provide error-free conversions of these documents.

Always look for:

• An agency that employs linguists with knowledge of legal terminology.
• Experience of the agency in dealing with local laws and regulations.

Discover some challenges faced by organizations during legal document translations. Refer to this blog: Legal Document Translations: Why Is It So Challenging?

Familiarity with International Accounting Standards

Several countries differ in accounting standards. During translations, it is imperative for companies to follow the accounting principles set by the target region. Failing to comply with this might lead to misrepresentation of financial data.

For instance,

• The U.S. follows the standards set by Generally Accepted Accounting Principles (GAAP).
• Several countries in the European Union follow the International Financial Reporting Standards (IFRS).
• In India, financial firms strictly adhere to Indian Accounting Standards (Ind_AS).

Always hire a financial translation agency that is completely knowledgeable about these region-specific accounting principles. Without this knowledge, even a perfectly translated sentence may present misleading or inaccurate data.

Strict Data Security and Confidentiality

Generally, financial documents contain sensitive information, like investor data, tax filings, cash flow statements, and trade secrets. During translations, this information is at risk of being leaked.

To avoid that, always ensure the translation company:

• Enacts a strict privacy policy.
• Follows end-to-end encryption platforms for file transfer.
• Implement measures like signing NDAs and other confidentiality agreements.
• Must be certified under ISO 17100 or ISO 27001.

Quality Assurance and Localization

High quality is always invaluable in translations. It is vital for linguistic services to follow meticulous quality assurance steps to ensure complete accuracy and compliance with laws in the target region.

Ensure that the translation company precisely localizes all the terms in the document.

For example, a financial term like “checking account” is acceptable in the U.S., but in the U.K. or India, it needs to be changed to “current account.”

Proven Track Record

We previously discussed the knowledge in the financial sector—but that is not enough. A document translation company must also have credible experience in the financial industry.

You may ask for:

• Any past projects or references in the financial industry.
• Client testimonials (if possible).
• Total experience in the linguistic sector.

Case Study: How a Simple Currency Translation Error Cost £1.3 Million?

In 2007, Build-A-Bear Workshop, a U.S.-based retailer, identified a major currency translation error in their U.K. operations’ financial report.

The mistake—which later proved to be costly—happened because of inaccurate conversions of currency from US dollars to British pounds. The inaccurate conversion led to inflated depreciation and amortization expenses by £1.3 million.

The consequences faced by Build-A-Bear Workshop included:

• Filing of incorrect financial statements.
• Damage to the company’s credibility in international markets.
• Loss of investor confidence.
• Several independent audits were carried out by regulators and financial analysts.

The case of the Build-A-Bear workshop perfectly represents the value of elements other than language, like currency and local laws, during financial translations.

If Build-A-Bear had partnered with a professional financial translation service, they would have avoided such legal and ethical scrutiny all those years ago.

Partner With the Right Translation Agency

Finding the perfect financial translation service is a meticulous process but a necessary step to ensure linguistic accuracy, cultural appropriateness, and local regulatory compliance. Fortunately, leading ISO-certified language service providers like Somya Translators offer innovative solutions that help companies sidestep every consequence of financial mistranslations.

With us, our clients get

• 16+ years of unmatched experience.
• Quality assurance—thanks to our stringent methodologies.
• The expertise of highly trained linguists who are deeply knowledgeable in the legal and financial sectors.
• A global network—so you don’t have to worry about regional preferences.
• Resolute customer service aimed at making your experience satisfactory.

So, if you want to translate financial documents containing legal clauses, compliance language, or regulatory content, explore our diverse range of services.

We can help you streamline every language challenge and expand into different markets.

Contact us now for a free quote!